Chevron Builds on CCS Portfolio With Greenhouse Gas Assessment Permit Offshore Australia

Rhea-AI Summary

Chevron (NYSE: CVX), through its subsidiary Chevron Australia New Ventures, has been awarded a greenhouse gas (GHG) assessment permit offshore Western Australia. The G-18-AP permit covers 8,467 km² and water depths of 50-1100m. This will be part of a CCS hub to store emissions, including from Chevron's LNG assets. Chevron holds a 70% interest, while Woodside Energy holds 30%. Chevron plans to farm down 5% equity to GS Caltex, conditional on approvals. This permit adds to Chevron's CCUS portfolio, including the Gorgon CCS project, which has stored 10 million tonnes of CO2-equivalent. According to the IEA, global net zero is unattainable without CCUS.

Positive

• Awarded GHG assessment permit offshore Western Australia covering 8,467 km².
• 70% interest in permit with Woodside Energy holding 30%.
• Expands Chevron's CCS portfolio, including the Gorgon CCS project.
• Gorgon CCS project captured and stored 10 million tonnes of CO2-equivalent.

Negative

• Equity farm-down to GS Caltex is conditional on regulatory approvals.

Environmental Policy Expert

Chevron's acquisition of the GHG assessment permit in Western Australia marks a significant step in expanding its carbon capture and storage (CCS) portfolio. This move aligns with the global push towards net-zero emissions and positions Chevron as a key player in the emerging CCS market.

The permit's strategic location offshore from Onslow provides Chevron with the potential to create a hub for storing third-party emissions, including those from its own LNG assets. This could significantly enhance the company's ability to reduce its carbon footprint and offer emissions reduction solutions to other industries in the region.

The joint venture with Woodside Energy and the potential involvement of GS Caltex demonstrates a collaborative approach to tackling climate change, which could lead to more efficient and cost-effective CCS implementations. However, the success of this project will depend on technological advancements, regulatory support and market demand for carbon storage services.

Energy Industry Analyst

Chevron's expansion of its CCS portfolio through this new permit is a strategic move that could yield significant long-term benefits. The company is positioning itself to capitalize on the growing demand for emissions reduction solutions, potentially creating a new revenue stream while addressing climate concerns.

The scale of the permit area (8,467 km2) and its water depth range (50-1100m) suggest substantial storage capacity, which could make it an attractive option for industries seeking to offset their emissions. Chevron's experience with the Gorgon CCS project, which has already stored 10 million tonnes of CO2-equivalent, provides valuable expertise for this new venture.

However, investors should note that CCS projects often require significant upfront investment and may face technological and regulatory challenges. The project's profitability will depend on factors such as carbon pricing mechanisms and the pace of global decarbonization efforts.

HOUSTON--(BUSINESS WIRE)-- Chevron Corporation (NYSE: CVX), through its subsidiary Chevron Australia New Ventures Pty Ltd (Chevron), has been awarded a greenhouse gas (GHG) assessment permit offshore Western Australia. The permit award provides further opportunity for Chevron to deliver on its strategy of safely delivering lower carbon energy to a growing world.

The G-18-AP permit is offshore from Onslow, Western Australia and covers an area of approximately 8,467 km² with water depths of 50-1100m. The permit area will be evaluated as part of a hub for storing third party emissions, including those from Chevron’s operated LNG assets.

The permit involves a joint venture with Chevron as operator, and Woodside Energy Ltd. Chevron will hold a 70% participating interest in the permit, and Woodside will hold a 30% participating interest. Chevron has agreed to farm down five percent of its equity in the permit to GS Caltex (GSC) of Korea. GSC’s entry into the permit is conditional on regulatory approvals and other matters.

“Chevron, along with our joint venture participants, have a unique set of assets, capabilities and customer relationships to support the further assessment, development and deployment of carbon capture and storage (CCS) in Australia,” said Chris Powers, vice president of CCUS & Emerging for Chevron New Energies.

“Together with the Chevron-operated Gorgon CCS project, one of the world’s largest integrated facilities, coupled with our existing GHG assessment permits, this new award has potential to expand Chevron’s portfolio of CCS assets in Australia,” he said.

Mark Hatfield, managing director, Chevron Australia said: “These opportunities have the potential to help us lower the carbon intensity of our own operations as well as provide opportunities to help our customers reduce or offset emissions from their activities.”

This block award adds to Chevron’s non-operated interests in G-9-AP, G-10-AP and G-11-AP as well as operating Gorgon CCS which has now captured and stored 10 million tonnes of CO2-equivalent.

According to the International Energy Agency, reaching global net zero will be virtually impossible without CCUS.¹

¹ Energy Technology Perspectives 2020, Special Report on Carbon Capture Utilisation and Storage p13
“Reaching net zero will be virtually impossible without CCUS”

About Chevron

Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable, and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. More information about Chevron is available at www.chevron.com.

Notice

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Chevron

Kelly Russell

KellyRussell@chevron.com

(936) 333-4077

Source: Chevron Corporation

FAQ

What is the recent permit awarded to Chevron related to CCS?

Chevron has been awarded a greenhouse gas assessment permit offshore Western Australia for CCS activities.

How much area does the new CCS permit cover?

The new CCS permit covers an area of 8,467 km² offshore Western Australia.

Who are the partners in Chevron's new CCS permit?

Chevron holds a 70% interest in the permit while Woodside Energy holds 30%, with a planned farm-down of 5% equity to GS Caltex.

What is the significance of the Gorgon CCS project for Chevron?

The Gorgon CCS project is one of the world's largest integrated facilities and has captured and stored 10 million tonnes of CO2-equivalent.

Does the new permit contribute to Chevron's lower carbon energy strategy?

Yes, the new permit helps Chevron in delivering lower carbon energy and supports its CCS expansion in Australia.